I couldn’t help but hear riffs of Doors songs in my head . . . Break on through to the other side … as I was reading The Breakthrough Company: How Everyday Companies Become Extraordinary Performers by Keith R. McFarland. The “other side” in this case is one where your basement startup is no longer a small company.
I liked McFarland’s book because, despite talking about companies bigger than my own small startup, the companies he focused on were not the classic behemoths. In fact, there were a few I knew quite well (The Staubach Company, for one). While the book is based on survey data of 7,000 companies, it didn’t read like a business school textbook. Instead, it focuses on only nine companies and included some firsthand stories and experiences. (Note to future business book writers–putting bits of yourself into the book is one way to keep it from reading like a dry textbook.)
I’ll cut to the chase because I know you’re all reading this book to find out what elements make a breakthrough company. According to McFarland, they are:
Throwing the dyno: In other words, taking that huge risk/leap of faith at the right time and in the right direction.
Crowning the company: Breakthrough companies do not have a coronation for the founder, but for the entire company–empower the masses, and growth should follow. One reason to do this is that sometimes the very strengths that make a great entrepreneur in the building stages–snap decision-making, stick-to-it stubbornness–can be liabilities as the company grows.
Upping the ante: Similar to throwing the dyno, it’s sort of a “go big or go home” strategy. The example McFarland gives is of Intuit co-founder Scott Cook, who had $100,000 in the bank and could either milk it for a few more months or go big with a huge ad campaign and spend it all in one swoop. Intuit went for it (all or nothing), and it worked!
Building company character: I loved McFarland’s emphasis on first impressions. What do people see when they go to your office? That all the execs have the front parking spaces? Or are they free for “expectant mothers only”? This reminded me of my old days in commercial real estate, when live people actually answered the company phone. Interviewing for a receptionist was crucial. At one high-end firm I worked for, they spent money to get qualified, friendly people who usually had an accent (English accents probably got a premium). At a less prestigious company where I also worked, they strove for the same thing, and I remember how much we loved the extremely capable and well-dressed woman with the impossible-to-understand East Boston accent, but went with the slightly younger gal with the Southern drawl and the questionable taste in dressing (we figured she was mostly on the phone or hidden behind the desk, so we could work on the dressing taste more easily than change a Boston accent).
While I run a virtual company, one thing I do is to have my staff and colleagues start every e-mail response, with “Thank you for writing,” no matter what the e-mail is about. I’ve found that this can defuse even an irate customer.
Other ways McFarland talks about how to find your company’s character is in the equation: Company Character = Values Translated into Action. (i.e. walk the talk.)
I also liked this chapter because I agreed wholeheartedly with his discussion of Fastenol’s success, which the CEO described as, “We hired attitude and trained aptitude.” I’ve always believed that the best person for any job is not always the individual who has all the required skills coming in. Many of those skills can be taught. Unfortunately, poor attitudes are something not so easily overcome. Thank goodness others believe in this or I never would have gotten some of the jobs I did! Another standout statement in this chapter: “A company’s view of people is an unmistakable reflection of its organizational character. If it sees people as selfish, lazy and unmotivated–that’s the kind of people it will attract.”
Navigating the Business Bermuda Triangle: McFarland describes the Business Bermuda Triangle as having three points: 1) Giving customers what they want; 2) Reacting quickly; and 3) Keeping costs low. Companies that don’t break through can get lost in this triangle as they grow. How to avoid the triangle? Two strategies:
- “Don’t diversify before you own your existing market.”
- “When you do diversify, let your customers lead you.”
Erecting scaffolding: Very good chapter on networking, as it doesn’t look at it from the individual point of view, but rather from a company perspective. The best part of this chapter was the “surprising findings” for breakthrough companies:
- Four of the nine profiled companies were founded or headed by people who belonged to the same organization–Young Professionals Organization (YPO).
- Networking was not an “executive” trend but was encouraged and executed by all employees at all levels. I was recently asked by a company after a speech about online networking whether I approved of its policy of only allowing senior management to use LinkedIn and other social networks. I have to admit, I was a bit blunt and asked her why didn’t it focus more on making younger employees want to stay, rather than keeping them from being recruited. I’d be surprised if they’re still in business a couple of years from now.
- Breakthrough companies use their network to build advisory boards that challenge them. No “yes” men and women.
- Breakthrough companies considered their clients and customers part of their networks.
Enlisting insultants: No, not Adam Sandler, but instead, company insiders who question the way things are done. Hmmmm. I’ve been called a troublemaker in the past for wanting to change things, but never an insultant. Not sure which I like better. But I certainly would never again work for a company that did not value employees who questioned the way things are done. In fact, some top companies such as EMC are enlisting social media to help democratize the practice (For more on this, check out my Smash the Ladder interview with Polly Pearson, VP of employment, brand and strategy engagement). Best part of this section is the Insultant’s Style Guide, which includes six tips for being a good insultant.
Graduating from Tough Times U: Basically, this chapter gave some advice as well as some really scary examples of tough times from breakthrough companies. I felt for Roger Staubach early on as a 10 percent owner stuck holding several million dollars in debt for everyone. But rather than fold, he turned things around with the help of many of the strategies discussed above.
Building the breakthrough company: McFarland ends with some steps to help you and your company break on through to the other side . . .
Top Shelf Bottom Line: This is a great book for startup companies to keep on their shelves as they grow. There are some good basic business 101 reminders but also some surprising insights. My favorite part of the book came at the end of each chapter where McFarland has a section of “Findings that surprised us.” These often surprised me, too.
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